Fears of a recession dominated the action on the trading floor Tuesday, as U.S. markets and investors struggled to find stable ground.
Ron Kiddoo of Cozad Asset Management said, “We are in a bit of a tug of war between whether we are going into a recession or have a slowing of the economy.”
Stocks tumbled following a report showing a surprise dip in December retail sales and a huge loss posted by Citigroup.
The largest bank in the nation posted a $9.83 billion dollar loss in the fourth quarter, triggering a sell-off of financial stocks and word the company could slash up to 4000 jobs.
The 0.4 percent drop in December sales, the biggest in six months, signaled the ongoing housing slump, credit crunch and soaring energy costs are causing americans to cut back elsewhere.
“Clearly with the housing market and the pressure on the workforce that is associated other factors that are driving buying behaviors,” said Janet Hoffman of Accenture’s North American Retail Practice.
Despite job market and retail woes, some analysts say other sectors of the economy are still strong.
“The exports sector is pretty strong and it is likely to strengthen some more. The big problem areas are high oil prices and a dollar decline. I think those will reverse and head in the other direction," said Lincoln Anderson of LPL Financial.
To help boost the chances of a recovery, the federal reserve is hinting it may cut interest rates once again later this month.
Some areas of the retail sector that did do well include furniture stores, health and beauty retailers and bars and restaurants.
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